Kodiak Gas Services Announces First Quarter 2025 Financial Results, Provides Updated Full Year 2025 Guidance

THE WOODLANDS, Texas--(BUSINESS WIRE)--May 07, 2025-- 

Kodiak Gas Services, Inc. $(KGS)$ ("Kodiak" or the "Company"), a leading provider of critical energy infrastructure and contract compression services, today reported financial and operating results for the quarter ended March 31, 2025 and updated full-year 2025 guidance.

Net income attributable to common shareholders for the quarter ended March 31, 2025 was $30.4 million, compared to $19.1 million and $30.2 million for the quarters ended December 31, 2024 and March 31, 2024, respectively.

First Quarter 2025 and Recent Highlights

   -- Record quarterly adjusted EBITDA(1) of $177.7 million 
 
   -- Contract Services adjusted gross margin percentage(1) increased 
      sequentially to 67.7% 
 
   -- Deployed 48,900 horsepower of new, large horsepower compression units 
 
   -- Fleet utilization increased sequentially to 96.9% 
 
   -- Repurchased approximately $10 million of common stock at an average price 
      of $36.87 
 
   -- Increased quarterly dividend by 10% to $0.45 per share, or $1.80 per 
      share annualized 

Revised 2025 Outlook Highlights

   -- Raised full-year 2025 adjusted EBITDA guidance to a range of $695 to $725 
      million, a $10 million increase to the low end of the range 

"Kodiak had another outstanding quarter, with strong recontracting results and increased operational efficiency driving new quarterly records in total revenues, adjusted EBITDA and discretionary cash flow," said Mickey McKee, Kodiak's President and Chief Executive Officer. "We continued to high grade our compression fleet, adding new, large horsepower units and divesting underutilized non-core horsepower assets. Execution of this strategy drove a third consecutive quarterly increase in fleet utilization and Contract Services adjusted gross margin percentage.

"Despite recent volatility in energy prices, the long-term growth outlook for U.S. natural gas supply and associated need for large horsepower compression infrastructure is unchanged, and Kodiak is committed to delivering the high level of service our customers expect with one of the safest and most sustainable contract compression fleets in the industry.

"The production focus of our compression services--supported by fixed-revenue contracts with premier customers operating in the most economic basins--drives the strength and resilience of our business model. Given the sustainability of our cash flow and the positive outlook for the remainder of the year, we increased our full year 2025 guidance and enhanced our return of capital to shareholders through share repurchases and the recently announced increase to our quarterly dividend, while continuing to drive to our leverage target."

 
(1) Adjusted EBITDA and adjusted gross margin percentage are non-GAAP 
financial measures. Definitions and reconciliations to the most comparable 
GAAP financial measure are included herein. 
 

Segment Information

Contract Services segment revenue was $289.0 million in the first quarter of 2025, a 3.1% increase sequentially. Contract Services segment gross margin was $125.2 million and adjusted gross margin was $195.7 million in the first quarter of 2025, the latter representing a 4.6% increase sequentially.

Other Services segment revenue was $40.7 million in the first quarter of 2025, a 38.8% increase sequentially. Other Services segment gross margin and adjusted gross margin were each $5.5 million in the first quarter of 2025, compared to $4.2 million in the previous quarter.

Long-Term Debt and Liquidity

Total debt outstanding was $2.6 billion as of March 31, 2025, comprised primarily of borrowings on the ABL Facility and senior notes due 2029. At March 31, 2025, the Company had $319.3 million available on its ABL Facility, and Kodiak's credit agreement leverage ratio was 3.7x.

 
Summary Financial Data 
(in thousands, except 
 percentages) 
                                     Three Months Ended 
                        -------------------------------------------- 
                         March 31,      December 31,     March 31, 
                            2025            2024            2024 
                        ------------  ----------------  ------------ 
Total revenues          $329,642       $   309,519      $215,492 
Net income 
 attributable to 
 common shareholders    $ 30,411       $    19,083      $ 30,232 
Adjusted EBITDA (1)     $177,664       $   169,072      $117,762 
Adjusted EBITDA 
 percentage (1)             53.9%             54.6%         54.6% 
 
Contract Services 
 revenue                $288,956       $   280,211      $193,399 
Contract Services 
 adjusted gross margin 
 (1)                    $195,721       $   187,027      $127,517 
Contract Services 
 adjusted gross margin 
 percentage (1)             67.7%             66.7%         65.9% 
 
Other Services revenue  $ 40,686       $    29,308      $ 22,093 
Other Services 
 adjusted gross margin 
 (1)                    $  5,460       $     4,242      $  4,409 
Other Services 
 adjusted gross margin 
 percentage (1)             13.4%             14.5%         20.0% 
 
Maintenance capital 
 expenditures           $ 16,407       $    14,858      $ 10,642 
 
Growth capital 
 expenditures(2)        $ 55,983       $    44,693      $ 52,221 
Other capital 
 expenditures(3)          22,258            26,393         7,180 
                         -------          --------       ------- 
   Total Growth and 
    Other capital 
    expenditures        $ 78,241       $    71,086      $ 59,401 
 
Discretionary cash 
 flow (1)               $116,084       $   107,690      $ 71,925 
Free cash flow (1)      $ 47,219       $    56,657      $ 12,524 
 
 
(1)    Adjusted EBITDA, adjusted EBITDA percentage, adjusted gross margin, 
       adjusted gross margin percentage, discretionary cash flow and free cash 
       flow are non-GAAP financial measures. For definitions and 
       reconciliations to the most directly comparable financial measures 
       calculated and presented in accordance with GAAP, see "Non-GAAP 
       Financial Measures" below. 
 
(2)    Growth capital expenditures made to (1) expand the operating capacity 
       or operating income capacity of assets including, but not limited to, 
       the acquisition of additional compression units, upgrades to existing 
       equipment, expansion of supporting infrastructure, and implementation 
       of new technologies, (2) maintain the operating capacity or operating 
       income capacity of assets by acquisition of replacement compression 
       units and their supporting infrastructure, and (3) expand the operating 
       capacity or operating income capacity of existing assets. 
 
(3)    Other capital expenditures made on assets required to support our 
       operations--such as rolling stock, leasehold improvements, technology 
       hardware and software and related implementation expenditures, safety 
       enhancements to equipment, and other general items that are typically 
       capitalized and that have a useful life beyond one year. Other capital 
       expenditures were previously included in growth capital expenditures, 
       but are now shown separately for both current and historical periods. 
 
 
Summary Operating Data 
(as of the dates 
 indicated) 
 
                              March 31,     December 31,     March 31, 
                                 2025           2024            2024 
                            -------------  --------------  ------------- 
Fleet horsepower (1)        4,422,914       4,402,747      3,290,971 
Revenue-generating 
 horsepower (2)             4,284,103       4,250,499      3,285,592 
Fleet compression units         4,941           5,069          3,091 
Revenue-generating 
 compression units              4,545           4,592          3,064 
Revenue-generating 
 horsepower per 
 revenue-generating 
 compression unit (3)             943             926          1,072 
Fleet utilization (4)            96.9%           96.5%          99.8% 
 
 
(1)    Fleet horsepower includes (x) revenue-generating horsepower and (y) 
       idle horsepower, which is comprised of compression units that do not 
       have a signed contract or are not subject to a firm commitment from our 
       customer and therefore are not currently generating revenue. 
 
(2)    Revenue-generating horsepower includes compression units that are 
       operating under contract and generating revenue and compression units 
       which are available to be deployed and for which we have a signed 
       contract or are subject to a firm commitment from our customer. 
 
(3)    Calculated as (i) revenue-generating horsepower divided by (ii) 
       revenue-generating compression units at period end. 
 
(4)    Fleet utilization is calculated as (i) revenue-generating horsepower 
       divided by (ii) fleet horsepower. 
 
 
Full-Year 2025 Guidance 
Kodiak is providing revised guidance 
 for the full year 2025. Amounts below 
 are in thousands except percentages. 
                                           Full-Year 2025 Guidance 
                                        ------------------------------ 
                                             Low             High 
Adjusted EBITDA (1)                     $  695,000      $  725,000 
Discretionary cash flow (1)(2)          $  430,000      $  455,000 
 
Segment Information 
Contract Services revenues              $1,150,000      $1,200,000 
Contract Services adjusted gross 
 margin percentage (1)                        66.5%           68.5% 
Other Services revenues                 $  160,000      $  180,000 
Other Services adjusted gross margin 
 percentage (1)                               14.0%           17.0% 
 
Capital Expenditures 
Maintenance capital expenditures        $   75,000      $   85,000 
 
Growth capital expenditures             $  180,000      $  205,000 

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